OFFICIAL DOCUMENTS LOAN NUMBER 8833-IN Loan Agreement (Madhya Pradesh Rural Connectivity Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN NUMBER 8833-IN LOAN AGREEMENT AGREEMENT dated as of the Signature Date between INDIA ("Borrower") and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("Bank"). WHEREAS (A) The Borrower has requested the support listed in (i) and (ii) immediately below to participate in the financing of its project referred to in this Agreement: (i) a loan from Asian Infrastructure Investment Bank in an amount equivalent to S 140,000,000; and (ii) a loan from the Bank in an amount of S210,000,000. (B) The Borrower intends to provide, or cause the State to provide, an amount equivalent to not less than $152,000,000 for the financing of the Project, plus such amount which would be determined from time to time pursuant to Order No. 2093 dated February 4, 2015 for the maintenance of the assets constructed or upgraded under Part A of the Project, such maintenance being exclusively financed by the State. NOW, THEREFORE, the Borrower and the Bank hereby agree as follows. ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - LOAN 2.01. The Bank agrees to lend to the Borrower the amount of two hundred and ten million Dollars ($210, 000,000), as such amount may be converted from time to time through a Currency Conversion ("Loan"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). -2- 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IH of Schedule 2 to this Agreement. 2.03. The Front-end Fee is one quarter of one percent (0.25%) of the Loan amount. 2.04. The Commitment Charge is one quarter of one percent (0.25%) per annum on the Unwithdrawn Loan Balance. 2.05. The interest rate is the Reference Rate plus the Variable Spread or such rate as may apply following a Conversion; subject to Section 3.02(e) of the General Conditions. 2.06. The Payment Dates are January I and July 1 in each year. 2.07. The principal amount of the Loan shall be repaid in accordance with Schedule 3 to this Agreement. 2.08. (a) If on any given day, the Total Exposure exceeds the Standard Exposure Limit (as said terms are defined in sub-paragraphs (b)(ii) and (bXiii) of this Section), the Borrower shall pay to the Bank a surcharge at the rate of one half of one percent (0.5%) per annum of the Allocated Excess Exposure Amount (as defined in sub-paragraph (bXi) of this Section) for each said day ("Exposure Surcharge"). The Exposure Surcharge (if any) shall be payable semi-annually in arrears on each Payment Date. (b) For purposes of this Section the following terms have the meanings set forth below: (i) "Allocated Excess Exposure Amount" means for each day during which the Total Exposure exceeds the Standard Exposure Limit, the product of. (A) the total amount of said excess; and (B) the ratio of all (or, if the Bank so determines, a portion) of the Loan to the aggregate amount of all (or the equivalent portions) of the loans made by the Bank to the Borrower and to other borrowers guaranteed by the Borrower that.are also subject to an exposure surcharge, as said excess and ratio are reasonably determined from time to time by the Bank. (ii) "Standard Exposure Limit" means the standard limit on the Bank's financial exposure to the Borrower which, if exceeded, would subject the Loan to the Exposure Surcharge, as determined from time to time by the Bank. -3- (iii) "Total Exposure" means for any given day, the Bank's total financial exposure to the Borrower, as reasonably determined by the Bank. ARTICLE M - PROJECT 3.01. The Borrower declares its commitment to the objectives of the Project To this end, the Borrower shall cause the Project to be carried out by MPRRDA under the oversight of the State, in accordance with the provisions of Article V of the General Conditions, Schedule 2 to this Agreement and the Project Agreement. ARTICLE IV - REMEDIES OF THE BANK 4.01. The Additional Event of Suspension consists of the following, namely, that MPRRDA's constitutive document or another legal document governing the operation of MPRRDA has been amended, suspended, abrogated, repealed or waived after the date of this Agreement, so as to affect materially and adversely the ability of MPRRDA to perform any of its obligations under the Project Agreement. 4.02. The Additional Event of Acceleration consists of the following, namely, that the event specified in Section 4.01 of this Agreement occurs and is continuing for a period of sixty (60) days after notice of the event has been given by the Bank to the Borrower. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consists of the following, namely, that the Co-financing Agreement has been executed and delivered and all conditions precedent to its effectiveness or to the right of the Borrower to make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled. 5.02. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. 5.03. For purposes of Section 9.05 (b) of the General Conditions, the date on which the obligations of the Borrower under this Agreement (other than those providing for payment obligations) shall terminate is twenty (20) years after the Signature Date. ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. The Borrower's Representative is any of the following officials: the Secretary, Additional Secretary, Joint Secretary, Director, Deputy Secretary or Under -4- Secretary of the Department of Economic Affairs of the Ministry of Finance of the Borrower. 6.02. For purposes of Section 10.01 of the General Conditions: (a) the Borrower's address is: Secretary Department of Economic Affairs Ministry of Finance, Government of India North Block New Delhi 110001, India; and (b) the Borrower's Electronic Address is: Facsimile: 91-11-2309 2247 91-11-23092883 6.03. For purposes of Section 10.01 of the General Conditions: (a) the Bank's address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Bank's Electronic Address is: Telex: Facsimile: 248423(MCI) or 1-202-477-6391 64145(MCI) -5- AGREED as of the Signature Date. INDIA orized Representative Name: Title: 42varr Date: fPRI. Z t INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT . * By Author epsetative Name: /4.SHAI-AS( Title: Ac-r'A)Q f' '7'f M k/ IN A. Date:_A_ I * 1a-s -6- SCHEDULE 1 Project Description The objectives of the Project are to improve durability and enhance resilience to climate changes of the gravel surfaced rural roads in Madhya Pradesh while building the capacity of the State to manage its rural road network and road safety. The Project consists of the following parts: Part A: Road Upradinz. Construction and Maintenance 1 . Surface Sealing of Gravel Roads. Sealing the surface of selected gravel surfaced roads developed under CMGSY using conventional bitumen and other alternative options; piloting post-construction maintenance through women self-help groups in selected Districts, including by providing them with road maintenance training and hand tools. 2. Provision of Alternative Connectivity. Providing additional links to eligible villages which are already connected by a single road link but critically require additional connectivity to respond to the growing demand to link to more social, economic and administrative centers. EL.: Institutional Development 1 . Rural Road Asset Management System. Defining the system requirements and terms of reference (overall system architecture, data collection and analytical modules) and then procuring a road asset management system, or such elements required to upgrade the existing system, as needed, to encompass the establishment of a complete inventory of the road network with all its elements, the current condition and performance of the road network, an estimate of the value of the asset, a forecast of future demand of traffic and service needs, an estimate of the maintenance needs and cost, a pricritization of the quality and performance objectives, funding scenarios for the regular and timely maintenance and upgrade of the road asset, the definition of a strategy for the maintenance of rural roads and its implementation. 2. Strengthening Design and Research and Quality Assurance Capacity of MPRRDA. Supporting MPRRDA's capacity by: (a) strengthening its design and research unit; (b) training design staff to enable them to do in-house design to support the field units and review consultants designs; (c) reviewing and updating the current rural road design standards and technical specifications; (d) reinforcing field -7- laboratories in selected Districts and training staff on laboratory and field tests; and (e) organizing study tours to share good examples of rural road design and research in India and abroad. Part C: Road Safety Managemet Capacity Development 1I Road Accident Data Management System. Developing a comprehensive and multi-institutional, multi-sectoral road accident data management system, including: (a) a geographic information system-based accident data collection software system for accident recording, storage, analysis and dissemination; (b) training at headquarter and District levels on database development, management and analysis; and (c) analyses of the data collected on accidents. 2. Pilot Comprehensive Road Safety Program. Piloting multi-sectoral road safety initiatives for a high-risk network, including the provision of technical assistance, training and equipment for the design and implementation of road safety engineering interventions further to an audit canied out with the active participation of the local community; road safety enforcement; post-crash emergency management; and road safety education and awareness. Part D: Desima Im.lementation and Management Sumort Providing overall support to MPRRDA with respect to Project management, c6struction supervision and quality control and technical and financing audits, including by. (i) preparing cost-effective, climate resilient engineering designs and related surveys and investigations; (ii) carrying out construction supervision of civil works and quality control; (iii) implementing independent monitoring of quality of design and works and contract compliance; and (iv) carrying out independent monitoring and assessments of safeguards compliance and the achievement of the Project outcomes. -g- SCHEDULE 2 Project Execution Section I. Imnpementation Arrantements A. Institutional Arrangements 1. To facilitate the carrying out of the Project, the Borrower shall make the proceeds of the Loan available to Madhya Pradesh in accordance with the Borrower's standard arrangements for developmental assistance to the States of India. 2. Notwithstanding the provisions of the preceding paragraph, in the event of a conflict between the Borrower's standard arrangements for developmental assistance to the States of India and the provisions of or referred to in this Agreement, the provisions of or referred to in this Agreement shall govern. 3. The Borrower shall exercise its rights under its standard arrangements for developmental assistance to the States of India in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan. Except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive its rights or obligations under said arrangements. B. Safeguards 1. The Borrower shall cause each of the Project Implementing Entities to ensure that all terms of reference for any technical assistance or studies carried out under the Project are consistent with, and pay due attention to, the Bank Policies, as well as the Borrower and Madhya Pradesh's own laws relating to the environment and social aspects relevant to the Project. 2. The Borrower shall cause each of the Project Implementing Entities to ensure that the Project shall be implemented in accordance with the guidelines, procedures, timetables and other specifications set forth in the Safeguard Documents. 3. Except as the Bank shall otherwise agree in writing and subject to compliance with applicable consultation and public disclosure requirements of the Bank, the Borrower shall ensure that none of the Project Implementing Entities abrogates, amends, repeals, suspends or waives any provisions of any of the Safeguard Documents, nor permits any entity participating in the implementation of the Project to do so. 4. Without limitation upon its other reporting obligations under this Agreement, the Borrower shall ensure that MPRRDA regularly collects, compiles and submits to -9- the Bank, on a semi-annual basis and promptly in a separate report whenever the circumstances warrant, reports on the status of compliance with the Safeguard Documents, giving details of: (a) measures taken in furtherance of the Safeguard Documents; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the Safeguard Documents; and (c) remedial measures taken or required to be taken to address such conditions. 5. The Borrower shall ensure that MPRRDA maintains and operates throughout the period of Project implementation, a grievance redress mechanism for the handling of any stakeholder complaints arising out of the implementation of the Project activities. 6. If any provision of the Safeguard Documents shall conflict with any provision under this Agreement, the terms of this Agreement shall prevail. Section II. Project Moltoring Reporting and Evaluation 1I The Borrower shall ensure that the MPRDDA furnishes to the Bank each Project Report not later than one month after the end of the calendar semester to which it relates. Section III. Withdrawal of Loan Proceeds A. General Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Borrower may withdraw the proceeds of the Loan to: (a) finance Eligible Expenditures; and (b) pay: (i) the Front-end Fee; and (ii) each Interest Rate Cap or Interest Rate Collar premium; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: -10- Category Amount of the Loan Percentage of Allocated Expenditures to be (expressed in USD) financed (inclusive of Taxes) (1) Goods, works, non- consulting services, and 209,475,000 42% consultants' services for the Project, including Incremental Operating Costs and Training, but expressly excluding maintenance of the assets constructed or upgraded under Part A of the Project. (2) Front-end Fee 525,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 3.01(a) of the General Conditions (3) Interest Rate Cap or Amount due pursuant to Interest Rate Collar Section 4.05 (c) of the premium General Conditions TOTAL AMOUNT 210,000,000 B. Withdrawal Conditions; Withdrawal Period. 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed $42,000,000 may be made for payments made prior to this date but on or after April 2, 2017, for Eligible Expenditures. 2. The Closing Date is March 15, 2023. Section IV. Procurement A. General 1. Goods, Works and Non-consulting Services. All goods, works and non- consulting services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. -11- 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in Sections II and III of the Procurement Guidelines, or Sections 11, 111, TV and V of the Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods, Works and Non-consulting Services I. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding procedures. 2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The following methods, other than International Competitive Bidding, may be used for procurement of goods, works and non-consulting services for those contracts specified in the Procurement Plan: (a) Limited International Bidding; (b) National Competitive Bidding ("NCB") subject to the additional provisions agreed from time to time in the Procurement Plan; (c) Shopping; (d) procurement under Framework Agreements in accordance with procedures which have been found acceptable to the Bank; (e) Direct Contracting: and (f) Force Account C. Particular Methods of Procurement of Consultants' Services I. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality and Cost-based Selection. 2. Other Methods of Procurement of Consultants' Services. The following methods, other than Quality and Cost-based Selection, may be used for procurement of consultants' services for those contracts which are specified in the Procurement Plan: (a) Quality-based Selection (b) Selection under a Fixed Budget; (c) Least Cost Selection; (d) Selection based on Consultants' Qualifications; (e) Single-source Selection of consulting firms; and (f) Single- source procedures for the Selection of Individual Consultants. -12- D. Review by the Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Bank's Prior Review. All other contracts shall be subject to Post Review by the Bank. -13- SCHEDULE 3 Amortization Schedule Subject to the provisions of Section 3.03 of the General Conditions, the Borrower shall repay each Disbursed Amount in semiannual installments payable on each January I and July 1. the first installment to be payable on the eleventh (11th) Payment Date following the Maturity Fixing Date for the Disbursed Amount and the last installment to be payable on the fiftieth- (50th) Payment Date following the Maturity Fixing Date for the Disbursed Amount. Each installment except for the last one shall be equal to one-fortieth (1/40) of the Disbursed Amount The last installment shall be equal to the remaining outstanding amount of the Disbursed Amount. 2. If any one or more installments of principal of the Disbursed Amount would, pursuant to the provisions of paragraph I of this Schedule, be payable after July 1, 2048, the Borrower shall also pay on such date the aggregate amount of all such installments. 3. The Bank shall notify the Loan Parties of the amortization schedule for each Disbursed Amount promptly after the Maturity Fixing Date for the Disbursed Amount. -14- APPENDIX Section . Deinitions I. "Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General Conditions, the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants," dated October 15, 2006 and revised in January 2011L" 2. "Annual Work Plans and Budgets" means the annual work plans and budgets (including related cash forecasts) for the implementation of the Project, referred to in Section I.E. I of the Schedule to the Project Agreement. 3. "Bank Policies" means, but only to the extent that they are applicable to the Project activities, the operational policies and procedures OP/BP 4.01 (Environmental Assessment), OP/BP 4.04 (Natural Habitats), OP/BP 4.10 (Indigenous Peoples), OP/BP 4.11 (Physical Cultural Resources), OP/BP 4.12 (Involuntary Resettlement), and OP/BP 4.36 (Forests), contained in the Bank's Operational Manual which can be found on the Bank's website at www.worldbankorg: and a "Bank Policy" means the Bank's operational policy and procedure as further specified in the relevant provision. 4. "Category" means a category set forth in the table in Section IU.A of Schedule 2 to this Agreement. 5. "Co-financier" means Asian Infrastructure Investment Bank. 6. "Co-financing" means, for purposes of paragraph 16 of the Appendix to the General Conditions, an amount of $140,000,000 to be provided by the Co- financier to assist in financing the Project. 7. "Co-financing Agreement" means the agreement to be entered into between the Borrower and the Co-financier providing for the Co-financing. 8. "CMGSY" means the Chief Minister's Rural Road Program launched by the State of Madhya Pradesh in 2010. 9. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 10. "Detailed Project Report" means a document prepared, or to be prepared, by MPRRDA with respect to an activity under the Project, that primarily reflects design of such Project activity and includes site assessment, technical/engineering -15- aspects, cost estimates, drawings apart from environmental and social documentation in accordance with the requirements set forth in the Environmental Management Framework and the Social Management Framework. 11. "District" means one of the 51 districts of Madhya Pradesh, each an administrative subdivision of the State. 12. "District Level Coordinating Committee" means a committee established at the District level pursuant to Order of the Governor of Madhya Pradesh No. F.22-45- 87-VIII dated May 5, 1988 constituting the District Road Safety Committees for. each District, and notified in the Official Gazette No. 193 dated June 16, 1988. 13. "Environmental Management Framework" means the Madhya Pradesh's document in two parts for the Project entitled respectively "Environmental Management Framework" and "Environmental Codes of Practices" each dated September 2016, which contains, inter alia, a description of the institutional arrangement for the implementation of the Environmental Management Framework; the principles, objectives and approach to be followed in avoiding, minimizing and mitigating the adverse environmental impacts that are likely to arise as a result of the implementation of the various construction activities under the Project; the various policies, guidelines and procedures that need to be integrated during the planning, design and implementation cycle of the Project; the indicative management measures required to effectively address or deal with the key issues that have been identified; as well as a Generic Environmental Management Plan. 14. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for IBRD Financing, Investment Project Financing", dated July 14, 2017, with the modifications set forth in Section II of this Appendix. 15. "Government eMarket (GeM)" means the Borrower's national public procurement portal. 16. "Incremental Operating Costs" means the incremental operating costs of the Project incurred by MPRRDA for purposes of Project management, implementation, and monitoring and evaluation on account of office supplies and consumables, utilities, bank charges, communications, mass media and printing services, vehicle rental, operation, maintenance, and insurance, office space rental, building and equipment maintenance, domestic and international traveL lodging, and subsistence allowances, and salaries and salary supplements of contractual and temporary staff, but excluding salaries, salary supplements and overheads of members of the State's or MPRRDA's civil service. -16- 17. "Madhya Pradesh" means the Borrower's State of Madhya Pradesh, or any successor thereto. 18. "MPRRDA" means Madhya Pradesh Rural Road Development Authority, the Madhya Pradesh agency established as a society registered under the Registration Act 1973 for the paving of rural roads. 19. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 (revised July 2014). 20. "Procurement Plan" means the Borrower's procurement plan for the Project, dated September 20, 2017 and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 21. "Project Implementing Entities" means, collectively, Madhya Pradesh and MPRRDA. and "Project Implementing Entity" means Madhya Pradesh or MPRRDA, as the context may require. 22. "Project Implementation Unit" means a unit established at the District level by MPRRDA pursuant to Department of Panchayat and Rural Development Order No. 16174 dated September 19, 2013; Department of Panchayat and Rural Development Order No. 11973 dated June 7, 2014; or Department of Panchayat and Rural Development Order No. 11463 dated April 28, 2017. 23. "Project Operations Manual" means the manual to be adopted by MPRRDA in accordance with the provisions of Section I.D.1 of the Schedule to the Project Agreement. 24. "Safeguard Documents" means, collectively, the Environment Management Framework, and the Social Management Framework; prepared for the Project in accordance with the provisions of these frameworks. 25. "Signature Date" means the later of the two dates on which the Borrower and the Bank signed this Agreement and such definition applies to all references to "the date of the Loan Agreement" in the General Coriditions. 26. "Social Management Framework" means the Madhya Pradesh document for the Project in two parts, entitled respectively "Social Management Framework" dated September 2016, (which contains, inter alia, an institutional arrangement, procedures and guidance to identify and mitigate adverse impacts on the assets and livelihoods of the people directly affected, as well as a capacity building program and a grievance redress mechanism) and "Vulnerability Framework" dated September 2016 (which contains, inter alia, guidance to ensure that the -17- development process generated by the Project fully addresses the needs of the vulnerable population and enables measures to promote distributional equity among the project affected populations, with particular attention to women, scheduled castes and tribes). 27. "State" means Madhya Pradesh. 28. "Training" means the reasonable cost of trainings, seminars and workshops, conferences and study tours for the Project, including: (i) the fees of training institutions and courses, (ii) travel costs, lodging costs, and subsistence/per diem allowances both for trainers and trainees; (iii) the rental of training facilities; and (iv) preparation, purchase or reproduction of training materials. Section II. Modifications to the General Conditions The General Conditions are hereby modified as follows: 1. Section 5.13 (Procurement) is deleted in its entirety and the remaining section in Article V is renumbered accordingly. 2. Paragraphs 84 (Procurement Plan) and 85 (Procurement Rgulations) in the Appendix are deleted in their entirety and the subsequent paragraphs are renumbered accordingly.